RBI to conduct Special OMOs on 2nd July to Pump up Liquidity

On 29^th June 2020, the Reserve Bank of India (RBI) has announced that it will be conducting a special Open Market Operations (OMOs) on 2^nd July 2020. The Open Market Operations was announced after reviewing the market conditions and evolving liquidity situations in banks. Through this special Open Market Operations, the aim will be to pump up liquidity in the financial system of the country.

About the Special Open Market Operations

Government Securities worth Rs 10,000 crore will be purchased and sold simultaneously during the special Open Market Operations.

At first, the Reserve Bank of India will be selling short term government securities worth Rs 10,000 crore that is maturing in between 15^th October 2020 to 29^th April 2021.

Then it will be purchasing new long term government securities worth Rs 10,000 crore that will have a maturity period between May 2027 to 5th December 2033.

Such operations were simultaneous selling and purchase of government securities are conducted by the Central Bank of the country are known as Operation Twist. This will be the second such operation in this financial year to be conducted by the Reserve Bank of India. The first Operation Twist of this financial year was conducted on 27^th April 2020 of Rs 10,000 crore.

Month: Current Affairs - June, 2020